Toys & apparels remain highest revenue earners in India

MUMBAI: The boom in the animation sector of Indian media and entertainment (M&E) has taken the industry by storm. This certainly is primed to welcome a novel story telling technique and also equally enticing revenue generating systems.

The fate of licensing and merchandising is linked to the success of a movie. Mediums such as toys, games, comics, apparels, music and videos offer 32 different product categories across which a movie’s licensing and merchandising (L&M) can be planned and in India toys and apparels have the widest scope.

"If one starts thinking of revenue streams along with the conception and development of movie script, it will offer apt L&M platforms and revenues potential. The two most important factors determining revenue streams in animation are equity of the character and retail," said George.

"Retail is booming in India and is expected to leverage merchandising in a big way, but a retail store dedicating 5000 sq ft of area to movie merchandise, like in the US, is still a distant reality in India," added Nagrajan.

Reeves said, "While manufacturing products, it is necessary to keep low cost of production and high rate of quality. Ancillary revenues are more successful in the second series of an animated movie."

Numerous animated movies have been made in the west and markets there, are flooded with umpteen merchandising properties. In the midst of this clutter, the challenge is it to make a property stand out and last long. "If the revenue curve of a property goes up very fast, it comes down too with the same speed, but manages to make a lot of money. On the other hand if the revenue chart goes up slowly, it lasts longer too. One should expand the breadth of a licensing program across various territories, categories and partners for maximum utilization," said Koocher.

Eurokids’ Mathur said that in the case of classic movies, the sales are steady and Eurokids acquires licenses for five years and in the case of fad based movie the sales are small and the license period is one-two years.

Giving an insight into various factors that determine the potential of a revenue stream of a product Shroff said, "Factors such as uniqueness of property, its looks, story, theme, appeal, target audience and timing can help in tapping the revenue potential to the fullest. Also, it is necessary to register the IPR of these properties across countries in the world. A feature film’s merchandise should release simultaneously with the movie and merchandise of TV show should release six months later, because hype builds faster around movies than TV shows."